New Mexico News

El Paso can expect slow growth in 2013

Contruction crews continue work on the new CVS Pharmacy on the corner of Meas and Texas Monday afternoon. (Vanessa Monsisvais / El Paso Times)

El Paso's economy is expected to be sluggish again this year -- mirroring expectations for the national economy -- a new UTEP study shows.

As measured by economic output, El Paso's economy is projected to grow 2.1 percent in 2013 -- slightly better than 2012's estimated 2 percent growth rate. Several national economic forecasts have the national economy growing around 2 percent this year.

The size of the El Paso economy has been hovering around $25 billion since 2011. By contrast, it was at $14.4 billion in 2000.

REPORTER

Vic Kolenc

"Slow and steady growth are projected for the national economy and the El Paso metropolitan economy," Tom Fullerton, an economics professor at the University of Texas at El Paso, said in an email. He is co-author of the recently released "Borderplex Economic Outlook: 2012-2014."

Congress late Tuesday reached a deal to avoid the "fiscal cliff." The deal now heads to President Barack Obama's desk.

If the fiscal cliff of drastic federal budget cuts and federal tax increases had not been avoided, then the economic projections would have changed because the national economy would probably contract and the El Paso and Juárez economies also would suffer, Fullerton said.

Advertisement

Frank Arroyos, president of the El Paso Association of Builders, the local homebuilders group, and owner of Cisco Homes, a small El Paso home-construction company, said he agreed with the UTEP assessment.

"This year (2012) in El Paso was slow all around," Arroyos said. "I see the economy slow again next year (2013)."

It continued to be tough to get buyers qualified for home purchases, and many potential buyers also seem to be waiting to see what happens to the economy, Arroyos said.

A newly completed home at 11890 Prado Del Sol in East El Paso.

Fullerton said the demand for single-family homes will be relatively healthy in 2013 because El Paso's population and labor force are expanding, and unemployment is declining. However, housing affordability will decline in 2013 because home prices are rising and mortgage rates are expected to increase, he said. Household incomes are also expected to grow more slowly in 2013, the UTEP report states.

Fullerton said that even though local and national economic growth rates are projected to be similar in 2013, the composition of that growth will be different.

"Transportation, warehousing, and health care will play bigger roles in El Paso in 2013 than they will nationally," Fullerton said.

Growth in the soldier population at Fort Bliss is expected to continue to add to El Paso's employment base, according to the UTEP forecast.

"Federal military employment, which already stands at more than twice its 2005 level, is projected to grow substantially" in the next two years, the UTEP report states.

Fort Bliss has about 32,000 soldiers now, spokeswoman Jean Offutt, said in an email. However, she said, the Army post does not expect additional growth in the soldier population in 2013.

Fullerton said Fort Bliss' employment data differ from data supplied by the U.S. Bureau of Economic Analysis, which, he said, also supplies historical employment data for the Army post.

El Paso is projected to continue to have steady job growth of 1.9 percent in 2013 and 2 percent in 2014. El Paso jobs grew an estimated 1.7 percent in 2012, which matched the 2011 rate, the UTEP report shows.

Even with the job gains, El Paso's unemployment rate is expected to remain high in 2013 at an annual rate of 9.6 percent. That would be down only slightly from the estimated annual rate of 9.8 percent in 2012, according to the UTEP report.